Shifting Landscapes: Examining Regional Trends in Private Infrastructure Investment Post-COVID-19

Source: Global Infrastructure Hub based on Realfin data.

In 2022, after almost a decade of stagnation, the value of private investment in infrastructure projects in primary markets saw a significant resurgence, increasing by 46% to be 41% higher than the past five-year average (2017-2021). The number of projects increased by 18% to be 30% above the five-year average, as seen in our previous data insight.However, this surge masks uneven performances across regions in the post-COVID era, with three out of the eight regions (Western Europe, North America, Latin America) surpassing their pre-COVID averages in 2022, three experiencing declines (Africa, Middle East and Oceania), and two remaining relatively on par (Asia and Eastern Europe).

Amongst all regions, Western Europe and North America have been the strongest performers in the post-COVID era, in terms of private infrastructure investment as a share of regional GDP. Investment in Western Europe has increased from a pre-COVID (2015-2019) average of 0.31% of GDP to 0.55% in 2022 (an increase of 0.24% of GDP), while North America has increased from 0.26% to 0.45% over the same period (an increase of 0.19% of GDP). Moreover, these two regions have grown their share of global private infrastructure investment over time and were the top two destinations for investors in 2022. North America has grown its share from a pre-COVID average of 23% to 31% in 2022, while Western Europe has increased its share from 19% to 25% over the same period. This growth has been led by the US, with notable contributions also from the UK and Canada. The outperformance of these high-income regions is in line with our previously published investment activity between high and middle- and low-income countries.

But as Western Europe and North America have increased their prominence over time, the share of private investment flowing to Asia has declined. Pre-COVID, Asia attracted the largest slice of the global investment pie with an average of 24%. However, its share has been shrinking since 2018, falling to 17% in 2022, marking the sharpest decline among all regions over this period. While Asia has maintained investment at a stable share of its regional GDP, this contrasts with the upward trajectory observed in Western Europe and North America and underscores the divergent performances across global regions. Western Europe and North America have pulled ahead, leaving Asia trailing behind.

Meanwhile in Latin America, private investment in infrastructure has also picked up in the post-COVID era, increasing from a pre-COVID average of 0.83% of regional GDP to 0.97% in 2022 (up 0.14% of GDP). Despite this increase, its share of global private investment in infrastructure has remained flat at 12%, due to much stronger growth and expanding shares in both Western Europe and North America.

Africa, the Middle East and Oceania have all seen a post-COVID decline in investment as a share of their regional GDPs as well as their shares of total global private investment in infrastructure. Collectively, their share of global investment has shrunk from 20% to only 13%.

The disparities among regions underscore the complex and evolving dynamics of private infrastructure investment in the aftermath of the global pandemic. As investors navigate these diverse landscapes, understanding the shifting patterns and emerging trends becomes crucial for informed decision-making in the evolving global economic scenario. The regional declines also highlight the pressing need to address underlying challenges in these markets to foster sustainable and equitable growth globally.

Post-COVID performance shows divergent regional trends in private investment in infrastructure.